February 14, 2011
Good morning. We had another quiet but positive week for the broad market last week, with the SPY quietly advancing 2.04 to finish at 133.11 (1.5%). The VIX, mainly due to the very quiet week, was down to 15.68, a drop of another 1.8%, and a level that we reached last April before the market underwent a roughly 15% correction. For whatever reason market advances have been associated with the significant decrease in market fear, so that virtually all market corrections or sell-offs have been associated with low implied volatilities at the start.
November 8, 2010
Good morning. Huge gains for the market last week, with the SPY’s up 3.6% to close at 122.72. This was primarily due to the announcement by the Fed on Wednesday that they were going to peg the so-called quantitative easing (QE II) at around $70B per month to a total of $600B. I think this number is in excess of the “street” number of $500B and I suspect the $70B per month is a little more aggressive than most thought before the announcement.